Can anyone recommend a luxury hotel on the water in Portugal?

Check out www.pousadas.pt or pestana hotels. I am sure they have several and they will be very appropriate for your request.

I love to stay in the Pousadas www.pousadas.pt You may choose the ones close to the seaside.
One that I like a lot is the Pousada de Estoi in Algarve.
Another choice is www.pestana.com with several hotels throughout Portugal.
Have a nice trip

LLING.. You have good taste!!!Pousadas hands down!!! We saw the one in Estoi before it was a pousada and even then in its abandoned and decayed shape it was awesome, and now it has a wonderful WOW factor..Jon_V you can't go wrong!!! Another one, but not on the water , is in Setubal, a castle and views of the sea.. There are so many from which to choose!! the web site will show a map of the locations and there are some really good bargins right now, dates to be determined.!!

Thanks, Estoi looks cool, what would be the best way to get there from London, should i rent a car in Lisbon? were from California and will be in London for a week first and thought Portugal would be fun, we like ocean views along with seafood and a nice pool.

The pousada in Viana do Castelo overlooks the sea. Fly into Porto, rent a car and drive a short distance north.

Or fy into Porto and take the train.

You might get in touch with the pousadas office and ask if they have a drive/stay package..They used to have one and it was a great deal..don't know if they are still a sort of a travel agency or not but you could ask. Or for that matter get in touch with Pestana Group as they now are involved with the pousadas.. Never know what you might come up with!!! It is nice to have a car as there are many villages and side roads less travelled to explore!!

Thank you all for the help#

BTW, if you decide to stay in the Pousadas, they have discount for over 55 years old. It´s called the Golden Age. If 5 nights get the "Golden Age passport" which is much cheaper per night, plus 2 vouchers of 20% reduction on the restaurants.

LLING says it for me..Lots of things available on the web site..It is amazing that more travellers don't log on, take advantage of the offers and enjoy 4/5 star and more!!! Pousadas are great..Likewise Pestana Hotels..ie: Pestana Palace in Lisbon!!!

What about things to do in this area for the three days we will be there.

Depends on where you end up..Driving to
Algarve from LIS. presents a fast, direct route or a wandering route..Check maps. If you stop in Sintra..the palace, of course. If you go straight to Algarve there is a market in Loule,on Sat. that is worth a stop. Head on out to the end of the western road..High cliffs, fishermen perched on sheer cliff faces..There is a pousada out there also the Infante, near Sagres past Portimao. Historical as it was the navigation school of Henry the Navigator..There is lots to do but you have to have some idea of where you will end up. Karen Brown website for Portugal is a good source of info.